Final answer:
A decrease in production costs leads to a shift of only the supply curve to the right as producers are willing to supply more at every price level. This is shown as a downward and rightward shift in the marginal cost curve, indicating increased productivity at a given price. It does not directly affect the demand curve.
Step-by-step explanation:
In the short run, a decrease in production costs of a product will shift only the supply curve to the right. This is because a reduction in production costs leads to an increase in supply; producers are willing to supply more at every price level, which is represented as a rightward shift in the supply curve. In economic terms, if marginal costs decrease across all levels of output, the marginal cost curve shifts downward and to the right, prompting a competitive firm to increase production.
Changes in supply do not directly affect the demand curve; the demand curve would only shift due to factors affecting the consumers' willingness and ability to purchase the product at various price levels, such as changes in consumer income, preferences, or prices of related goods. Hence, the decrease in production costs would not cause the demand curve to shift.